FBAR Reporting & the 4th of July
|Posted on June 30, 2013 at 8:30 AM|
It was time to come up with a topic for my next blog, but as summer crept into our lives here, in Norway, it was easier to wish the rain would go away, and wistfully recall good times with old friends. That must explain why I woke up this morning humming the words of Simon & Garfunkel’s Scarborough Fair, and not the Stars & Stripes Forever.
The sense of loss brought on by living in what is still, ultimately, a foreign culture, combined with both the isolation many experience when at their sometimes remote ‘summer cabins’ and the simultaneous need to find solace in old and strong American friendships, with friends who are no longer anywhere near, is only raised another notch on the day on which the American Coordinating Council of Norway (ACCN) holds its Frogner Park, Oslo celebration of American ‘Independence Day,’ known more commonly in the U.S. simply as ‘the 4th of July.’ So . . .
Are you goin’ to Scarborough Fair?
(Parsley, sage, rosemary & thyme)
Remember me to one who lives there –
He once was a true love of mine.
Now that we’ve gotten our priorities in order, it is time to note – to all Americans overseas – the imminent change in the FBAR reporting procedure. This is the reporting requirement for Americans overseas who have any combination of foreign (non-U.S.) accounts (bank and/or securities)(even one) with, a total of the equivalent of $10,000 at any time during the year. In that case, one is obliged to file what is called the FBAR report – Foreign Bank Account Report. The form itself has the innocuous title, TD F 90-22.1, which only reminds us of how pathetically out-of-tune bureaucracies can be when it comes to assuaging natural human fears of numbers, and people’s related reporting obligations. We leave that essay for another time.
Onward, Americans – to the challenge at hand: reporting your foreign bank accounts – but no longer ‘on paper.’ The imminent news is: you are now (well, starting in a few hours) supposed to only file those forms ONLINE. Yes, paper production has been officially squelched, and hundreds of trees are, on the day you are reading this, being saved as a consequence. On the other hand, hundreds of Americans overseas are trying to figure out how to e-file the online form. We’ll all see how it works out.
I’ve had quite a few inquiries about this form in the past few months, as more Americans in Norway and Europe get ‘on-board’ with their ‘filing obligations,' shall we say nicely. I therefore created a ‘form e-mail’ reply, which takes the desperate and clueless and leads them softly by the hand through the current FBAR form. I’ll copy that here, under the philosophical title, ‘How to Approach the FBAR Form.’
How to Approach the FBAR Form
Here's some FBAR information I usually send folks when they express their concerns. Since it is mostly a secretarial job for me, I don't do it - it's really quite easy for you to do. Read this note below when you open up the form.
As you will see when you open it, each page or section is for a different type of circumstance.
The first page is for starting to list any accounts you actually own yourself. First, you enter your personal information, which will include your Social Security number (called ID number) at the top. Then, there is room in the middle of that page to list your first foreign account (a non-U.S. account)(one you own).
Page 2 is a continuation page. You just put some ID information in the top boxes and then can continue to list any other accounts you own yourself. You put the bank name, address, account number and highest balance during the year for each of the accounts you own yourself.
You use page 3 to start any list of accounts you own jointly with someone else. This can include any joint accounts owned with non-Americans (ex: your Norwegian wife or husband), and highest balance during the year you are filling it out for. (These are joint accounts – therefore, don’t forget to show their name and address, as required.)
You can see that page 4 is where you would list any accounts where all the money is someone else's and is in their account, but you can access it (example: you use that account, which only includes your husband's money, to buy groceries with your debit card). (Don’t forget to show all the requested information for each of those accounts including the name of the other person.)
You can see that page 5 is the page where you would list any account that you have in a company name, not your personal name. You show the company name on that page and the other information as requested, which is similar to that requested on the other pages.
You only use the page types that you need.
The rest of the pages are instructions to read if you need to do that.
At this time, you should report back to 2006. Also note, the year reported is just for you to enter at the top of the pages. Therefore, you are doing the same forms for each year, for each account that was foreign during that year. If you are catching up, you’ve got at least 6 pages involved for one account (1 page x 6 years), and multiples of that if you have more accounts to show.
If you have questions, you can call the IRS – they are the only experts in this matter.
They threaten grave actions against persons who have the obligation to file and don’t. If you had the equivalent of $10,000 in any given year in any combination of foreign accounts, you must file these forms annually. They are due to be received by June 30 of each year. This means not posted-by June 30th but received by them.
Don’t delay in doing these forms.
The address to post them to is in the middle of page 1 . . . .
End of my form e-mail message!
And - oops! No more mailing the form to Detroit!
“Imminent” means: almost immediately. Is tomorrow soon enough? FBAR filings will be electronic starting tomorrow, July 1st, 2013.
The notice was not received by this tax preparer until yesterday, so they’re really giving us a lot of notice on this. Ah, well, it’s probably part of the pared-down ‘American way.’ Still, if Congress wants to save money, I recommend they stop cutting the IRS’s budget, and start cutting their own salaries, redirecting lobbying outlays to public services for the needy, and increasing corporate tax coverage and tax rates. To start. It certainly makes more sense than crippling America’s tax administration.
To help them out a bit, here’s the latest link to information listed at the IRS website. It includes internal links to the form, the FBAR question and answer folks, and other information needed to get started with e-filing of the FBAR form: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-%28FBAR%29
And now, how can we Americans overseas respond when, for example, the ‘Independence Party’ takes place on June 30th, is bound to be rained out, and is half in Norwegian? Answer: With at least serious pride, if not outright glee. Therefore,
Hurrah for the flag of the free!
May it wave as our standard forever,
The gem of the land and the sea,
The banner of the right.
Let despots remember the day
When our fathers with mighty endeavor
Proclaimed as they marched to the fray
That by their might and by their right
It waves forever.
Categories: Law Stuff, International Miscellaneous, Political Jargon